Why Microsoft Should Buy Sony Instead

Yahoo!'s a nice thought and all, but if Mister Softie wants to firm up its videogame operation, it needs to make a different acquisition.

For decades, bigger was always better in the world of videogames. Nintendo's eight-bit NES replaced Atari's crude 2600. Then Sega's sixteen-bit Genesis took over where the NES left off. Eventually Sony's PlayStation came along and surpassed those. Better processors and better technology made for better graphics, which was virtually the only basis by which gamers bought consoles.

But as Microsoft and Sony are learning, bigger no longer means better. While their Xbox 360 and Playstation 3 both offer incredibly detailed graphics, their opponent, the Nintendo Wii, has been sold out of stores for two years straight, despite the fact its innards are only slightly better than its predecessor, the overlooked Nintendo GameCube.

Why is the Wii so popular? Anyone who owns one will tell you the same story: A friend will come over, notice videogames, and ask to play something "fun." Inevitably, the host will fire up the Wii, because it has more two-player games. Because its controls are easy to understand. Because its controls work well. And because every single game isn't a hyper complicated shooter that requires months of mastery to learn. (And, let's not forget: The Wii is cheaper by about fifty bucks, at least.)

We're now on the verge of a recession, and Sony and Microsoft are in trouble. Games are luxuries. Nobody "needs" them. Nor does anyone need such hi-tech features as the Blu-Ray, HDMI compatibility Sony's pushing. But there is a solution to Sony and Microsoft's woes: they should join forces to make one system, for less money. Yes, I'm dreaming big. With this whole Yahoo! merger in play, it will never happen. But both companies have invested too much in video games, and they want to win. So I ask, in case either will listen: why two nearly identical multimedia future-machines? Why not join up and make only one?

A few compelling reasons to do so:

1. Microsoft's Xbox 360 has the most atrocious hardware in consumer electronics history. It's so bad, the company had to extend 360 warranties to three years, spending a billion dollars in the process, just to fix systems that keep breaking on a whim. I've had four systems break in only three years. They're becoming known as a lemon-maker with great games. Meanwhile, Sony makes great hardware but...

2. Sony has the worst software interface in the business. Compared to the Wii, Sony's online friend management and gameplay are an utter mystery, requiring endless navigation of its Byzantine menu structure. Sure, buried inside the PS3 are plenty of amazing "potential technology" features -- like the ability to install Linux, or its wireless connectivity with the PSP -- but who cares? No one needs these features to play games. Even worse, developers can't seem to make games for the PS3, while the 360's development toolkit is a relative stroll in the park.

3. Cost-cutting. The PS3 still costs more to make than it does on store shelves, which has led to $841 million operating loss for Sony's games division as of the end of October 2007. Until it pulls a profit, it's an albatross for all of Sony. Microsoft feels like it's finally gaining ground on Sony, with a library of titles that are superior, and an online interface that is miles better -- not to mention a larger installed base of sales in the U.S -- but they blew a billion dollars to extend the faulty system's warranty to three years. Splitting the cost on a next-gen system might be a wise idea.

4. Big in Japan (kinda). Nintendo dominates in Asia, but at least the PS3 sold nearly two million systems... as opposed to the 360, which has yet to break a million units in Asia after three years on the market. Sony can help Microsoft understand that whole "Asia" thing a lot better. The world gaming market is growing to China, Korea, India -- places where Sony still has clout.

5. And now, for the biggest reason of all: maybe, with two brains put together, they can help each other learn what "fun" means.

Ten years from now, Sony will still have hardware engineering expertise on its side. Microsoft will understand software. But making all-in-one media systems isn't where the money is, because in ten years, everything will be doing that already. Every PC can connect to a TV, or even replace a TV -- with YouTube, streaming video, downloaded rentals, and plenty of games. The Xbox 720, the PS4 -- they'll be just like your computer. What Sony and Microsoft can't buy, though, is innovation.

By working so hard to add everything from the ability to play friends online to store your entire music collection, Sony and Microsoft forget the main point of the videogame system: To play videogames! Interfaces like the one the Wii has developed don't come easily, and when successful, like the iPod, they can dominate for a decade or more. Everything plays games now. Cell phones, laptops, iPods -- and in ten years, your mobile phone will play pretty damn good games. Nintendo's edge isn't games -- it's the fun factor, the unique experience. And it only needs to bump up its graphics to corner the market completely. The Wii's unique controller, simple games, and easy-to-use feel, those are locked in. If the next Wii decides to become a true HD system, where will that leave Sony and Microsoft then?

Developers go where the money is. Nintendo's Wii and DS platforms were the top two selling game systems in the country in 2007. That's what matters to the third-party companies that make most of the games -- not graphics. The biggest market will win. As of this writing, that would be Microsoft, with 9.15 million U.S. consoles sold. Second place in the U.S. is Nintendo, with 7.38 million. But not for long. Nintendo outsold Microsoft handily in 2007, and Microsoft's reputation for making systems that break is growing daily. Worldwide, Nintendo dominates with 20.64 million systems, ahead of the 360's 16.71 million. And they did it in less time.

Nintendo has the finger on the mainstream. And with upcoming games like Wii Fit, they've understood that many people like the idea of getting off their asses and being active. They're the party company, while Sony and Microsoft are selling hard-core gamers hard-core online experiences that require HDTVs for maximum appreciation -- HDTVs that most of the U.S. population still do not own, despite Best Buy ad campaigns suggesting the contrary.

I pray Sony and Micrsoft will figure it out. Right now, I mainly use one (the PS3) as a DVD player, and the other (the Xbox 360) as a paperweight until it gets fixed. Meanwhile, the Wii gives me a reason to throw parties, instead of being antisocial. Who cares about going online in tournaments, when all anyone really wants to do is have some friends over and play games, like they did when they were seven?

I'm sick and tired of trying to decide which game system is "the best." And I'm even more sick of having my consoles break on me, going through system updates that take forever…the industry needs an Apple-style simplification, and Nintendo's onto it.

It's not too late to catch up, Sony and Microsoft. But time's ticking.

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